Rocky relations: The Senkaku islands on the East China Sea which Japan, China and Taiwan all claim ownership of

The ongoing row threatening relations between Asia's biggest economies could further be complicated by Taiwan - which also claims ownership of the rocky isles.

A group of Taiwanese fishermen said as many as 100 boats escorted by 10 Taiwan Coast Guard vessels would arrive in the area later on Monday.

China's Xinhua news agency said in the morning that two civilian surveillance ships were undertaking a 'rights defence' patrol near the islands, citing the State Oceanic Administration, which controls the ships. One fishery patrol vessel was also detected inside waters claimed by Japan.

By afternoon, all three Chinese vessels had moved further away, the Japanese Coast Guard said.

China and Japan, which generated two-way
trade of $345 billion last year, are arguing over a group of uninhabited
islands in the East China Sea, a long-standing dispute that has erupted in recent weeks.

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Sino-Japanese relations deteriorated sharply after Japanese government decided to buy some of the islands - called Senkaku in Japan and Diaoyu in China - from a
private Japanese owner.

The move, which infuriated Beijing,
was intended by Japan's government to fend off what it feared would be
seen as an even more provocative plan by the nationalist governor of
Tokyo to buy and build facilities on the islands.

In response, China sent six surveillance ships to the area, which contains potentially large gas reserves.

There were scenes of violent disorder as anti-Japan protests erupted in China.

Japanese factories were forced to temporarily close in China and expatriate workers advised to stay indoors after angry demonstrations spilled on to the streets.

There were violent attacks on well-known Japanese businesses in China, such as car-makers Toyota and Honda, in the country's worst outbreak of anti-Japan sentiment in decades.

Activists protest against China in Tokyo as the territorial row over the islands intensifies

A demonstration in China. The long-standing dispute erupted when the Japanese government bought some of the islands from a private Japanese owner

Two Japan Coast Guard boats, centre and right in foreground, sail ahead of a fleet of Chinese surveillance ships near the islands

The arrival of Taiwan vessels in the
area could complicate the potentially fraught game of cat-and-mouse
being played near the islands, where mainland China has launched an
effort to assert sovereignty by sending government ships into the
disputed waters.

Relations between the two countries deteriorated sharply after Japan bought the islands, which are called Senkaku in Japan and Diaoyu in China

The islands have long been the target of demonstrators. This image, taken last month, shows a boat of activists pinned into submission by Japan's coast guard patrol

The
Taiwan fishing group said their boats would sail around the islands to
reassert their right to fish there and did not rule out trying to land
on the rocky isles.

Taiwan Defence Minister Kao Hua-chu told parliament that the military was ready for any contingency, but did not elaborate.

Taiwan
has traditionally had friendly ties with Japan, but the two countries
have long squabbled over fishing rights in the area. Beijing deems
Taiwan to be an illegitimate breakaway province, and the two sides both
argue they have inherited China's historic sovereignty over the islands,
which are near rich fishing grounds and potentially huge oil and gas
reserves.

The latest
flare-up in tensions over the islands comes at a time when both China
and Japan confront domestic political pressures. Japanese Prime Minister
Yoshihiko Noda's government faces an election in months, adding
pressure on him not to look weak on China.

China's
Communist Party is preoccupied with a leadership turnover, with
President Hu Jintao due to step down as party leader at a congress that
could open as soon as next month.

Noda
leaves for New York on Monday to take part in the annual gathering of
the U.N. General Assembly, and attention will focus on whether he refers
to the dispute.

Worries are
simmering that the row could hurt the economic ties that closely bind
China and Japan. China is Japan's largest trading partner. In 2011,
their bilateral trade grew 14.3 percent in value to a record $345
billion.

Tokyo's Nikkei
China 50 index, composed of stocks of Japanese companies with
significant exposure to the world's second-largest economy, shed about
1.3 percent on concerns over the dispute.

Bank
of America Merrill Lynch said Japanese car manufacturers saw a 90
percent drop in showroom traffic and a 60 percent fall in sales in the
southern Chinese province of Guangdong, the largest market for Japanese
brands, since the beginning of the anti-Japan protests.